Medicaid Estate Recovery in PA: Selling a Parent's House After Nursing Home Care
Short answer: if your mom or dad was 55 or older and Pennsylvania Medical Assistance (Medicaid) paid for nursing home care or in-home long-term care, the state can file a claim against their estate after they pass. The house is not taken. Instead, the claim is paid from the estate, which often means from the money when the house sells. You can still sell the house; the executor just needs to get the claim amount from DHS, check for waivers or postponements, and settle it at or before closing.
This comes up constantly with families in Scranton, Wilkes-Barre, and the towns around them. A parent spends their last years in a nursing home or on a home care waiver, the house sits, and after the funeral a letter shows up about "estate recovery." Here is what it means and how it affects a sale.
What Medicaid estate recovery is
According to DHS's Estate Recovery page, the Estate Recovery Program allows the Commonwealth to recover Medical Assistance payments made for a person who received long-term care Medical Assistance, including nursing facility care and Home and Community Based Services, from the time they turned 55 until they passed. Federal law requires states to do this, and Pennsylvania's version is in 62 P.S. 1412 and 55 Pa. Code Chapter 258.
The key points from the regulation:
- Who it covers: people who were 55 or older when they received Medical Assistance for nursing facility services, home and community based services, or related hospital and prescription drug services, on or after August 15, 1994.
- What the claim is: the total Medical Assistance paid for those services from age 55 on. When care was delivered through a managed care plan, the claim is based on what DHS paid the plan.
- What it is not: it does not apply to people who received Medical Assistance only before turning 55 and whose eligibility ended before 55.
Is the house part of the claim?
Under 55 Pa. Code 258.3, all estate property is subject to the claim, meaning real and personal property the personal representative administers (or could administer). For most NEPA families, that means the house if it was titled in the parent's name alone at death. The same section lists property that is not subject to the claim, including:
- Property held with another person as joint tenants with right of survivorship or as tenants by the entireties (the usual form for married couples).
- Life insurance paid directly to a named beneficiary rather than to the estate.
- Assets placed in certain trusts before death, if they are not payable to the estate.
So the first question is simple: whose names are on the deed, and how? Your county Recorder of Deeds can pull a copy. If you are not sure what an estate even includes, our plain-English guide to selling an inherited house walks through it.
Selling while your parent is still alive
Many families sell a parent's house while the parent is in a nursing home, often using a power of attorney. Estate recovery itself is an after-death claim, but selling while a parent is on Medicaid raises a different issue: the sale money belongs to your parent and can affect their Medicaid eligibility. Talk to an elder law attorney before you list or accept any offer, and make sure the sale is reported the way your parent's caseworker requires. Our post on selling a parent's house with power of attorney in PA covers the POA side.
After a parent passes: how the claim works
1. Open the estate
The executor (if there is a will) or administrator (if not) gets letters from the Register of Wills in Luzerne County, Lackawanna County, or wherever your parent lived. Only that person can sign to sell a house held by the estate. See our PA probate timeline for how long this usually takes, and what happens when someone dies without a will if there is no will.
2. Request a statement of claim from DHS
Under 55 Pa. Code 258.4, the personal representative has a duty to find out whether the decedent received Medical Assistance in the 5 years before death and, if so, send DHS a written request for a statement of claim. The request goes by certified mail, fax, or email and includes the decedent's name, last address, date of birth, date of death, Social Security number, the representative's contact details, and documentation of the gross value of the estate.
DHS then has 45 calendar days from a complete request to send its statement of claim. The regulation says that if DHS misses that window, its claim is forfeited, though an incomplete request pauses the clock. DHS lists the Estate Recovery Program at P.O. Box 8486, Harrisburg, PA 17105-8486, phone 800-528-3708.
3. Know where the claim falls in line
Under 55 Pa. Code 258.6, the claim is paid in the order Pennsylvania law sets for estate debts. It is behind perfected liens on specific property (like a mortgage on the house) and the family exemption, and the part covering services in the last 6 months of life gets a higher priority than the rest. Reasonable funeral expenses and administration costs come into the picture too, so an attorney should map out the order before anything is distributed.
4. Do not hand out money early
55 Pa. Code 258.8 makes the personal representative personally liable if estate property is transferred to heirs without paying (or properly protecting) the DHS claim. That is why title companies and attorneys usually want the statement of claim in hand before closing on an estate house, and why siblings should not split sale money until the claim is handled. Our post on selling an inherited house with multiple siblings covers keeping everyone on the same page.
Postponements and hardship waivers
Under 55 Pa. Code 258.7, DHS postpones collection until the last of these occurs:
- the death of a surviving spouse,
- the death of a child who is blind or totally and permanently disabled,
- the date any surviving child turns 21, or
- the death, transfer, or move-out of a sibling with an ownership interest who lived in the home for at least 1 year before the decedent's death.
During a postponement, the representative still has to protect the claim, for example by recording a mortgage or other encumbrance on the house in favor of DHS.
Under 55 Pa. Code 258.10, DHS will permanently waive its claim on the primary residence for a person who meets all three conditions: they lived in the home continuously for at least 2 years (immediately before nursing home care began, or during home care waiver services), they have no other permanent residence, and they provided care or support for at least 2 years during that period. The same section allows waivers for certain income-producing property, for very small estates with an heir, and for the necessary costs of keeping up the house (taxes, utilities, repairs, lawn care, snow removal) while the parent was receiving care. Waiver requests go to the Estate Recovery Program address above.
Quick guide by situation
| Situation | What usually happens to the claim | First step |
|---|---|---|
| Parent still living, on Medicaid in a nursing home | No estate claim yet; selling now can affect Medicaid eligibility | Talk to an elder law attorney before listing or accepting any offer |
| Parent passed, house in their name alone | House is estate property; the claim is paid from the estate, often from sale proceeds | Open the estate and request a statement of claim from DHS |
| Surviving spouse still living | Collection is postponed until the spouse's death | Ask an estate attorney how the claim must be protected meanwhile |
| Adult child lived there and was the caregiver | May qualify for an undue hardship waiver on the home | Request the waiver forms from DHS and gather proof of residence and care |
| House was joint with right of survivorship | Not subject to the claim under the regulation | Have an attorney confirm how the deed is titled |
Selling the house to pay the claim
When the house is the main estate asset, selling it is usually how the claim gets paid. A few practical points:
- The claim is paid at or after closing, not up front. The title company pays the mortgage and other liens from the proceeds, and the estate pays the DHS claim from what is left, in the order the law requires.
- Keep paying the carrying costs. Taxes, insurance, and utilities on a vacant house keep running while the estate is open. Keep receipts; as noted above, necessary upkeep while your parent was receiving care can count toward a waiver. Our guide to selling a vacant house in NEPA covers insurance and winterizing.
- Price it at fair market value. The regulation defines fair market value as what the property would be expected to sell for on the open market. A sale to a relative at a bargain price can create problems for the representative, so get an attorney's sign-off on any family sale.
- Plan for taxes and costs. Pennsylvania inheritance tax and closing costs come out too. See PA inheritance tax: what heirs need to know and closing costs when selling a house in Pennsylvania.
Families usually choose between listing with an agent, which can bring a higher price but takes longer and may need repairs and a cleanout, and selling as-is to a cash buyer, which is usually faster and simpler but at a lower price. Our cash vs. agent comparison and cash offer vs. listing: the real net help you compare the dollars. If the house is full of a lifetime of belongings, see estate cleanout in NEPA.
How a sale like this works with us
We talk with the executor or administrator, look at the house, and give a written, no-obligation offer for it as-is, with no repairs or cleanout needed. Closing is timed around the estate paperwork, including the DHS statement of claim. A title company handles the closing, pays off liens from the proceeds, and the estate's share goes to the estate so the representative can pay the claim and distribute the rest. If listing would likely net the estate more, we will tell you. Our inherited homes page and how it works page explain the steps, and how to spot a legitimate cash buyer helps you vet anyone you talk to. For the bigger picture on a parent's home, see what to do with your parent's house in Lackawanna County.
Frequently asked questions
Can Pennsylvania take my parent's house because of Medicaid?
Not while your parent is alive. Pennsylvania's Estate Recovery Program lets the Department of Human Services (DHS) file a claim against the probate estate after the person dies, to repay long-term care Medical Assistance paid from age 55 on. If the house is part of the estate, the claim is usually paid from the sale proceeds before heirs receive their shares.
Who does Medicaid estate recovery apply to in PA?
Under 55 Pa. Code Chapter 258, it applies to people who were 55 or older when they received Medical Assistance for nursing facility care, home and community based services, or related hospital and prescription drug services, for services on or after August 15, 1994.
Is a house owned jointly with a spouse subject to the claim?
The regulation says property held with another person as joint tenants with right of survivorship, or as tenants by the entireties, is not subject to the Department's claim. How a deed is titled matters, so have an estate attorney read the deed.
How does an executor find out how much DHS is owed?
The executor or administrator sends DHS a written request for a statement of claim with the decedent's details and the gross value of the estate. DHS has 45 calendar days from a complete request to send its statement of claim. For questions, DHS lists the Estate Recovery Program at 800-528-3708.
Can the claim on the house be waived?
Sometimes. DHS will permanently waive its claim on the primary residence for a person who lived in the home and provided care for at least two years under the conditions in 55 Pa. Code 258.10 and has no other permanent residence. Collection is also postponed while a surviving spouse is alive, while a child is under 21, or for a blind or disabled child, among other cases. An estate attorney can tell you whether any of these fit.
The bottom line
Medicaid estate recovery does not stop you from selling a parent's house in Pennsylvania. It means the executor needs to request the DHS statement of claim, check for postponements or a hardship waiver, and settle the claim from the estate before money goes to heirs. Get an estate attorney involved early. When you want a real number for the house, visit the NEPA Cash Offer homepage, request a cash offer, or call (570) 600-6504.
